UPDATE 2-Ford ready to seek loans guaranteed by government

(Adds details from Ford CEO on economic outlook, background)

By David Bailey

DEARBORN, Mich., Sept 8 (Reuters) - Ford Motor Co(F.N) is ready to seek low-interest loans backed by the U.S. government for new fuel-saving technologies, CEO Alan Mulally said, as industry backers press for up to $50 billion of such funds.

Mulally, declining to confirm whether he would lobby personally in Washington this week for loan guarantees, said on Monday he believed lawmakers now take a more favorable view of industry efforts to increase fuel-efficiency.

"I think last year was a turning point," he told a business group meeting in Dearborn. "I was very pleased with the reception we got for what we are doing on fuel efficiency."

Mulally, whose remarks came the day after the announcement of a government takeover of mortgage finance companies Freddie Mac (FRE.N) and Fannie Mae (FNM.N), said government support for the U.S. auto industry would not be a bailout.

"The only conversation we have now is, what is the right way to finance, and what is the right provision for deciding which companies participate," he said. "We are very positive."

An energy bill passed by Congress in December mandated a 40 percent increase in vehicle fuel efficiency standards by 2020 but also included a provision for $25 billion of loan guarantees to support plant retooling.

Lawmakers have not yet approved the funding for that program. To meet provisions in the law, Congress would have to approve spending $3.8 billion of taxpayer funds to cover the potential default costs of $25 billion in low-interest loans.

In recent weeks, some auto industry executives have suggested that a larger loan program could be in order.

The industry is interested in obtaining another $25 billion in loans not covered in the existing legislation.

General Motors Corp (GM.N) CEO Rick Wagoner said last month that GM was also interested in pursuing federal loan guarantees.

Wagoner declined to say how much financing GM or its suppliers could seek under such a program.

BATTLEGROUND STATES

Lawmakers and President George W. Bush have at times been seen as indifferent, if not hostile, to supporting the auto industry.

But Republican presidential candidate John McCain and Democratic candidate Barack Obama both have expressed interest in helping the industry make the transition to producing electric and other alternative vehicles.